MSFT stock price: Microsoft stock falls today after slashing AI sales targets – what investors need to know

MSFT stock today: Microsoft stock dropped more than 2% on Wednesday after multiple divisions of the tech giant have lowered sales growth targets for certain artificial intelligence products after many sales staff missed goals in the fiscal year ending June, as per a report. The move is reportedly rare for Microsoft, particularly within its Azure cloud unit, as per a Reuters report.

MSFT Stock Price Today Drops

Shares of the company fell after the report, even as the stock has gained roughly 16% year-to-date. The decline comes amid concerns about the real-world adoption of AI, which remains limited, an MIT study earlier this year found that only around 5% of AI projects progress beyond the pilot stage.

US tech companies, including Microsoft, are under investor pressure to show that their heavy investments in AI infrastructure are generating returns.


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Microsoft’s Record AI Spending and Capital Expenditures

Microsoft reported record capital expenditures of nearly $35 billion in its fiscal first quarter in October and indicated that spending would continue to rise. The company also predicted that it would remain short on AI capacity at least until the end of its fiscal year in June 2026.

Microsoft Stock (MSFT) Performance and Market Outlook for Investors

Meanwhile, Baron Fifth Avenue Growth Fund wrote in its third-quarter 2025 investor letter that Microsoft’s one-month return was -3.38%, while the stock gained 12.02% over the past 52 weeks, as per an Insider Monkey report.

The fund noted that quarterly earnings data point to significant AI opportunities in both productivity enhancements and incremental revenues. Microsoft ranks second on the fund’s list of 30 most popular stocks among hedge funds, with 312 portfolios holding the stock at the end of Q3, up from 294 in the previous quarter, as per the Insider Monkey report.

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FAQs

Why did Microsoft stock fall on Wednesday?
Shares dropped over 2% after the company lowered AI sales growth targets for some products.

Why did Microsoft lower its AI sales targets?
Many sales staff missed their goals in the fiscal year ending June, prompting the adjustment.